Australia in 2013 saw the election on September 7 of Liberal Party leader Tony Abbott as the country’s 28th prime minister. He took office on September 18 as the head of a conservative Liberal-National coalition. The election brought to an end six tumultuous years of Labor government. Tensions between Prime Minister Julia Gillard and Kevin Rudd, whom she had ousted from the Labor Party leadership in 2010, contributed to her party’s falling fortunes, and in June Labor turned reluctantly back to Rudd to stanch an expected election landslide.

A barge transports a group of Vietnamese asylum seekers to Christmas Island, an external territory …

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Australian Prime Minister Tony Abbott

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Australian warship HMAS Perth sails into Sydney Harbour as part of the …

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Rupert Murdoch’s News Corp. Ltd. newspapers campaigned hard for a Liberal-National coalition victory. The Sydney paper The Daily Telegraph ushered in the campaign with the front-page headline “Kick this mob out.” After the election Labor chose a new head, former union leader Bill Shorten, who was elected in the party’s first experiment with participatory democracy: for the first time, the votes of rank-and-file party members were included, though they were given less weight than those of members of the parliamentary caucus.

The election saw the emergence of a new minor conservative party, the Palmer United Party (PUP), led by flamboyant billionaire businessman Clive Palmer. He was elected to the federal House of Representatives from the Queensland seat of Fairfax by a margin of 53 votes.

Abbott crafted his successful election campaign on the issues of economic management; border protection; opposition to a mining tax, which he said would damage one of Australia’s most important industries; and opposition to a carbon tax designed to lead to an emissions-trading scheme. Abbott, who opposed “alarmist” action on climate change, proposed incentive-based “direct action” to encourage polluters to reduce greenhouse-gas emissions by 5% by 2020.

A crucial element of the national debate was the issue of the 50,000 asylum seekers who had arrived by boat since 2007. Gillard had made agreements with Papua New Guinea and Nauru in 2012 for the offshore detention and processing of asylum seekers, but in July and August the Rudd government went farther, instituting a policy of settling refugees in those countries in exchange for increased aid. Abbott promised to “stop the boats” altogether, and to turn back boats at sea if necessary, which, after the election, caused diplomatic friction with Indonesia.

In October the Australian Capital Territory legislature approved same-sex marriage in the territory. The federal government immediately appealed to the High Court, which overturned the law in December on the grounds that the legality of same-sex marriage was a federal matter.

The Economy

The economy continued modest growth, with inflation, unemployment, and interest rates each in the low single digits. But an anticipated $A 1.5 billion ($A 1 = about U.S.$0.90) surplus in 2012–13 did not materialize. Instead, the country showed an $18.8 billion deficit as the mining boom slowed, along with the economy of major trading partner China. Australia’s growth estimate was cut from 2.75% to 2.5%, and unemployment was forecast to rise to a decade-high 6.25%. Abbott promised to return the budget to a surplus of 1% of GDP ($14 billion) over a decade. In October the government announced it would raise the debt ceiling from $A 300 billion to $A 500 billion.

Foreign Affairs

Australia wound down its 12-year, $A 7.5 billion involvement in Afghanistan as part of the staged withdrawal of the NATO-led military coalition. In March the government announced that more than 1,000 troops would return home by the end of 2013 and that the Tarin Kowt base in Uruzgan province would be handed to Afghan forces. Australia was projected to have only about 400 personnel in Afghanistan in 2014, including instructors, advisers, support staff, and a small number of special forces. The government left open the possibility that special forces would perform a continuing counterterrorism role. The Liberal-National coalition aimed to increase defense spending from 1.6% to 2% of GDP.

Abbott regarded Indonesia as Australia’s most important overall relationship, and soon after taking office he held talks with Indonesian Pres. Susilo Bambang Yudhoyono on issues that included Abbott’s asylum-seeker policy. Relations with Indonesia plummeted in November, however, when it was revealed that Australian intelligence had monitored the phones of Yudhoyono, his wife, and his senior advisers. Foreign policy remained focused on engagement with six key partners: the U.S., China, Japan, India, Indonesia, and South Korea.

Australia returned to the UN Security Council after a 27-year absence as a nonpermanent member for 2013 and 2014. During Australia’s monthlong UN Security Council presidency in September, it sponsored a resolution to restrict trade and distribution of illicit small arms and light weapons. Australia was also rotated into a 12-month chair of the G20 beginning in December.

Although the Labor government had aimed to increase foreign aid spending from 0.36% to 0.5% of gross national income (GNI), Abbott pledged to cut the growth in foreign aid by $A 4.5 billion over four years, to an estimated 0.33% of GNI. More than 70% of Australian’s foreign aid went to the Asia Pacific region.

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